Thursday, October 9, 2008

Chickens Coming Home

You think after throwing everything out there now, that people will finally start realizing this isn't a liquidity crisis but an insolvency crisis?

There is plenty of money to lend. The Fed will keep printing it until we all add zeros to all our financial dealings. There simply aren't enough credit worthy people to loan to anymore. We are a sub-prime nation as I have noted in the past.

This is the danger of utopian socialism and while Obama is the more dangerous candidate in this regard, McCain isn't exactly opposed to it which is why it is so hard for him to truly attack Obama. They both believe magical platitudes and legislation make problems go away. Much of the West is stuck in this dangerous mindset. It is one that uses sarcasm and smears to ignore reality. To me the most interesting example of this is how the Sunday talk shows all now spend a segment on the jokes throughout the week. It is apparent that even they would rather watch reality be dismissed with a laugh than report on it.

One of the reasons the derision has been aimed so strongly at Palin is that she reignites the culture wars in many regards and that is really what much of this is about. She may mangle an answer or two at a gotcha press conference, but the real danger is that she will remind us that two parents are better than one and legislation and money can't change that no matter how hope-filled, mavericky or anything else it happens to be. You can't spend more than you earn. One can't really be two. We love our kids and try to help them through their mistakes rather than letting them run to the village that deluded them in the first place for help.

On the business side, income matters, jobs matter, ratios matter not just to borrowers but to lenders and no acts or legislation that compels either side of these equations to ignore these facts will work. No amount of good intentions in the beginning or blame in the end will change this. Of course we won't have much chance of moving to a true understanding of this while the Sunday talk shows would rather laugh at people than report news and discuss true solutions. Nero truly is fiddling while Rome burns.